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Omar Venerio
Omar Venerio
Articles (1697) 

Tuesday Morning Market Highlights

Micron gains on earnings beat

U.S. Markets

U.S. stocks were in the green on Tuesday, with consumer confidence for June up to 98.1 this month from a revised 85.9 in May. The Dow Jones Industrial Average gained 0.35% to 25,684, the S&P 500 index rose 0.93% to 3,081 and the Nasdaq Composite Index climbed 1.32% to 10,004.

Gainers

Losers

Global Markets

The main European stock markets traded mostly lower. The U.K.'s FTSE 100 fell 0.86%, France's CAC 40 retreated 0.34%, Germany's Dax was up 0.52% and Spain's Ibex 35 slid 0.68%.

In Asia, Japan's Nikkei 225 gained 1.33%, India’s BSE Sensex fell 0.13%, Hong Kong's Hang Seng gained 0.52% and China's Shanghai Composite was up 0.78%.

Micron Technology releases earnings report

Shares of Micron Technology Inc. (NASDAQ:MU) jumped more than 5% on Tuesday morning after the company announced third-quarter results on Monday evening. It posted a gain of 82 cents per share, beating analysts’ estimates by 6 cents. Revenue of $5.44 billion grew 13.6% year over year, but fell $130 million short of expectations.

CEO Sanjay Mehrotra had the following to say:

“Micron’s exceptional execution in the fiscal third quarter drove strong sequential revenue and EPS growth, despite challenges in the macro environment … We are ramping the industry’s most advanced DRAM technology into production and have delivered more than 75% of our NAND volume as high-value solutions, supported by record SSD revenue in the quarter. Our portfolio momentum positions us exceedingly well to leverage the long-term growth across our end markets.”

By segment, DRAM revenue grew 5.6% year over year and 16.3% sequentially to $3.59 billion, representing almost two-thirds of total sales. NAND sales increasaed 50.8% from the prior-year quarter and 10% quarter over quarter to $1.67 billion, representing 31% of the total top line.

Looking at cash generation, the company generates operating cash flow of $2.02 billion versus $2.00 billion for the previous quarter and $2.71 billion for the same quarter of 2019.

Looking ahead to the fourth quarter of fiscal 2020, the company expects revenue to be between $5.75 billion and $6.25 billion, with a gross margin of around 34.5%.

Hedge funds were active during the quarter ended March 31. Philippe Laffont (Trades, Portfolio) increased his stake by 10,913% to 1,005,000 shares. Donald Smith (Trades, Portfolio) reduced his position more than 6.4% to 1,869,962 shares, while Ray Dalio (Trades, Portfolio) sold out of the stock.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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